The closure of the supermarket, after 40 years of operation, paves the way for a Dan Murphy's liquor shop.

Resident Garth Head said the nearest supermarket was now up to three kilometres away.

"They've left us without a local shopping centre.

"Not everyone can make it the extra distance to the next one.

"A lot of elderly residents are relying on family or taxis."

The Liberal candidate for Oakleigh, Theo Zographos, who collected signatures from more than 500 people objecting to the development, said it was a sad day for the community.

"I was there meeting residents who were doing their last shop on Sunday. They were really disappointed.

"Woolworths hasn't wasted a second. They've already taken all the signage down."

Mr Zographos described the move as "gutless".

"There's been no credible community consultation with customers who have been loyal to that store for decades.

"It's not in the best interests of the community and the fight to have the Dan Murphy's stopped will continue."

Woolworths community relations manager Simon Berger said a refurbished supermarket at Centro Oakleigh and supermarket at Links Business Park would better serve the community.

Objections to the proposal will be heard at an independent liquor licensing panel hearing.

No date has been set yet for the hearing.